Uwm Holdings Corporation · NYSE:UWMC
Uwm — Gores Holdings IV — SPAC Merger (November 2020)
50 slides from Uwm's SPAC merger presentation, Nov 17, 2020
Slide 1: Analyst Day Nov 2020
Exhibit 99.1 ANALYST DAY Analyst Day Nov 2020 1Exhibit 99.1 ANALYST DAY Analyst Day Nov 2020 1
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking information within the meaning of applicable United States securities legislation. All information contained in this presentation, other than statements of current and historical fact, is forward- looking information. Often, but not always, forwa
Slide 3: Proxy Solicitation
PROXY SOLICITATION Additional Information about the Proposed Business Combination and Where to Find It On October 2, 2020, and as amended on November 6, 2020, the Company filed with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement in connection with the proposed busin
Slide 4: Analyst Day Nov 2020 4Analyst Day Nov 2020 4
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Slide 5: Agenda
AGENDA Company & Industry Overview 01 Mat Ishbia | President & CEO Underwriting, Operations & Client Experience 02 Melinda Wilner | EVP, Chief Operating Officer Technology Featuring: Jason Bressler | EVP, Chief Technology Officer 03 Interviewed By: Sarah DeCiantis | EVP, Chief Marketing Officer Clie
Slide 6: Best Way to Get a Mortgage = Mortgage Broker
BEST WAY TO GET A MORTGAGE = MORTGAGE BROKER Faster Easier Cheaper Analyst Day Nov 2020 6BEST WAY TO GET A MORTGAGE = MORTGAGE BROKER Faster Easier Cheaper Analyst Day Nov 2020 6
Slide 7: UWM Is the Largest Wholesale Originator with Dominant Market Position
UWM IS THE LARGEST WHOLESALE ORIGINATOR WITH DOMINANT MARKET POSITION th • Company was started in 1986 – Mat joins UWM in 2003 as the 12 person (1) • We are the #2 mortgage originator and the 33% $2.0B #1 wholesale originator in the U.S. Wholesale mortgage Book Value originations through Q3 2020 • O
Slide 8: Importance of Company Culture
IMPORTANCE OF COMPANY CULTURE Capitalizing on lessons learned by being on an NCAA National Championship basketball team, UWM is run like a successful sports team with captains, daily huddles and a team culture. Analyst Day Nov 2020 8IMPORTANCE OF COMPANY CULTURE Capitalizing on lessons learned by be
Slide 9: Our Pillars
Our Pillars PILLAR 1 PILLAR 2 Our people are Service is everyone’s UWM’s our greatest asset responsibility VALUE SYSTEM Our Mission Statement PILLAR 4 PILLAR 3 We are dream makers united to make dreams We are We are thumb pointers come true relationship driven, not not transaction finger pointers fo
Slide 10: In a Cyclical Market UWM Bucks the Trend
IN A CYCLICAL MARKET UWM BUCKS THE TREND Winning in this market Purchase Focused gain more market share in rising rate market 2016 – 2018 Broker channel We’ve done this before in local community Analyst Day Nov 2020 10IN A CYCLICAL MARKET UWM BUCKS THE TREND Winning in this market Purchase Focused g
Slide 11: Faster, Easier, Cheaper Closings
FASTER EASIER Closings Technology UWM - 17 days Process Industry - 47 days Service UWM’s MODEL IS TIED TO MORTGAGE CHEAPER BROKERS Q3 Interest Rates UWM - 2.83% Retail - 3.13% Analyst Day Nov 2020 11FASTER EASIER Closings Technology UWM - 17 days Process Industry - 47 days Service UWM’s MODEL IS TIE
Slide 12: Wholesale Channel Share of the Mortgage Market
WHOLESALE CHANNEL SHARE OF THE MORTGAGE MARKET 35% 33% 33% 33% + 32% 30% 30% 28% 27% 26% 25% 23% 21% 20% 19% 20% 17% 16% 16% 15% 15% 15% 14% 14% 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E Analyst Day Source: Inside Mortgage Fin
Slide 13: Wholesale Share of Overall Market and UWM Share
Wholesale Share of Overall Market and UWM Share 33% 33% DOMINATE WITH 21% 22% 20% SERVICE, 17% 16% 15% 15% 14% TECHNOLOGY 15% 11% & PARTNERSHIP 8% 7% 2014 2015 2016 2017 2018 2019 2020E 2026E Analyst Day Source: IMF data (historicals), Wall Street Research, MBA and Fannie Mae estimates (overall mark
Slide 14: Level the Playing Field
1 2 3 LEVEL Access to Liquidity Servicing Resources THE 4 5 PLAYING Borrower Technology Education FIELD Analyst Day Nov 2020 141 2 3 LEVEL Access to Liquidity Servicing Resources THE 4 5 PLAYING Borrower Technology Education FIELD Analyst Day Nov 2020 14
Slide 15: Be the Best Together We Will Never Relax
BE THE BEST TOGETHER WE WILL NEVER RELAX Analyst Day Nov 2020 15BE THE BEST TOGETHER WE WILL NEVER RELAX Analyst Day Nov 2020 15
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Slide 17: Faster, Easier & Cheaper
FASTER, EASIER & CHEAPER Faster Close Time More Efficient Application to Ready-to-Close 2019 Avg. Loans per Month per Production Team Member ~17 Days 8.8 Application to Ready-to-Close 6.7 29 Days 2.3 Application to Ready-to-Close Industry Avg. ~47 Days UWM Rocket MBA Avg. Analyst Day Source: MBA; El
Slide 18: Operations and Underwriting Process
Operations is involved from submission to the close of a loan. With the benefit of specialized technological innovation, each operations team is able to specialize and focus on a specific loan function, driving speed and efficiency in parallel to Underwriting, ensuring all elements of a loan are add
Slide 19: Scale & Consistency Delivers Speed
SCALE & CONSISTENCY DELIVERS SPEED Efficiency Training The Underwriting training process is ongoing, holistic and made to scale UWM Operations and Underwriting team members are the most efficient in the industry averaging about 3.5 times 280 51 the industry production hours of hours of continuous in
Slide 20: Loan Quality
LO A N QU ALIT Y High Quality Credit Focus • Our focus on high quality borrowers and lower risk loans 757 drives tremendous scalability FICO Average • Underwriting quality and speed are not mutually exclusive 36%71% Loan-to- • Average FICO consistently top 3 amongst peers Debt-to- Value (LTV) Income
Slide 21: Net Promoter Score
NET PROMOTER SCORE • Net Promoter Score (NPS) is a range from -100 to +100 • NPS indicates the client’s willingness to recommend UWM • NPS is widely considered the benchmark of client satisfaction Analyst Day Source: internal company data, Bain, Customer Guru. Nov 2020 21NET PROMOTER SCORE • Net Pro
Slide 22: Client Experience Driving Satisfaction & Loyalty
CLIENT EXPERIENCE DRIVING SATISFACTION & LOYALT Y No Call Left Behind Client Request (CR) Platform A homegrown system where clients Every inbound call to can send specific requests to any Add visual What UWM is answered team within the company, regarding a by a human being question or issue on a loa
Slide 23: Our Winning Formula
Faster Easier Mortgage OUR Broker WINNING FORMULA Cheaper Analyst Day Nov 2020 23Faster Easier Mortgage OUR Broker WINNING FORMULA Cheaper Analyst Day Nov 2020 23
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Slide 26: Wholesale Channel Share of Overall Market and UWM Share
WHOLESALE CHANNEL SHARE OF OVERALL MORTGAGE MARKET AND UWM SHARE OF WHOLESALE MARKET 45% Wholesale Channel Market Share UWM Share of Wholesale Channel 36% 32% 33% 21% 22% 20% 17% 16% 15% 15% 14% 15% 11% 8% 7% 2014 2015 2016 2017 2018 2019 2020E 2025E Analyst Day Source: IMF data (historical), compan
Slide 27: UWM Delivers a Best-in-Class Broker Experience
UWM DELIVERS A BEST -IN-CL ASS BROKER EXPERIENCE With Plenty of Room to Grow White Glove Service at Lightning Speed Leading Edge Technology 100% Focused on the Broker Channel Unique Loan Officers and Further Growth Opportunity Diversified Platform 70,000 2020 YTD Revenue Contribution 63,000 60,000 4
Slide 28: Technology and Data & Analytics
Continuous monitoring of broker wallet share TECHNOLOGY AND DATA & ANALY TICS... Sophisticated and dynamic pricing Engine customized for various broker cohorts Daily market surveillance and monitoring allows UWM Data-driven client segmentation and to appropriately price, track & engage with brokers
Slide 29: Growing the Broker Channel
GROWING THE BROKER CHANNEL LO Partner Points Success Track Broker Services Program for client’s to earn points No-cost training designed to by taking advantage of products & accelerate a client’s business Recruiting Coach services designed to get the whether they are experienced, borrower to the clo
Slide 30: FindAMortgageBroker.com
FINDAMORTGAGEBROKER.COM A An na ally ys stt D Da ay y N No ov v 2 20 02 20 0 30FINDAMORTGAGEBROKER.COM A An na ally ys stt D Da ay y N No ov v 2 20 02 20 0 30
Slide 31: BeAMortgageBroker.com
BEAMORTGAGEBROKER.COM A An na ally ys stt D Da ay y N No ov v 2 20 02 20 0 31BEAMORTGAGEBROKER.COM A An na ally ys stt D Da ay y N No ov v 2 20 02 20 0 31
Slide 32: Our Winning Formula
Faster Easier OUR Mortgage Broker WINNING FORMULA Cheaper Analyst Day Nov 2020 32Faster Easier OUR Mortgage Broker WINNING FORMULA Cheaper Analyst Day Nov 2020 32
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Slide 34: UWM Projections Less Aggressive Than Q3 2020 Annualized Performance
UWM PROJECTIONS LESS AGGRESSIVE THAN Q32020 ANNUALIZED PERFORMANCE …IN LINE WITH LAST TWELVE MONTHS (LTM) Q3 2020 Annualized 2021 Projected 2022 Projected Volume ($Bn) 54,289 217,158 210,000 240,000 Gain Margin ($MM) 1,724 6,896 3,785 3,986 Gain on Sale (%) 3.18% 3.18% 1.80% 1.66% Net Revenue ($MM)
Slide 35: Impact of Further Gain Margin Compression
IMPACT OF FURTHER GAIN MARGIN COMPRESSION PRIMARILY OFFSET BY LOWER MSR AMORTIZATION (PAID IN FULL) Q3 Margin was 318 BPS 2021 2022 Projected Margins 180 166 EBIT 2,341 2,465 If gain margins decline: • Amortization/PIF materially slows • MSR values increase significantly Source: Internal data Gain m
Slide 36: UWM Realized Continual Improvements in Fixed Cost per Loan
UWM REALIZED CONTINUAL IMPROVEMENTS IN FIXED COST PER LOAN Cost Per Loan 3,000 2,500 2,000 1,500 1,000 500 0 2015 2016 2017 2018 2019 2020 YTD Cost Per Loan - Fixed Cost Per Loan - Variable Analyst Day Source: Internal data Nov 2020 36UWM REALIZED CONTINUAL IMPROVEMENTS IN FIXED COST PER LOAN Cost P
Slide 37: Lower Cost: Costs to Originate
LOWER COST ($) Costs to Originate (2019) 8,872 8,402 7,282 Current: 6,625 UWM Wholesale Channel Retail Channel Source: Internal data and Stratmor and Company dataLOWER COST ($) Costs to Originate (2019) 8,872 8,402 7,282 Current: 6,625 UWM Wholesale Channel Retail Channel Source: Internal data and S
Slide 38: UWM Purchase Mortgage Production Growth Outpaces National Market
UWM PURCHASE MORTGAGE PRODUCTION GROWTH CONSISTENTLY OUTPACES NATIONAL MARKET National Mortgage Market 2015 2016 2017 2018 2019 Refinance 776 999 616 467 1,028 Annual Growth (%) - 28.7% -38.3% -24.2% 120.1% Purchase 903 1,052 1,143 1,209 1,225 Annual Growth (%) - 16.5% 8.7% 5.8% 1.3% UWM Mortgage Pr
Slide 39: UWM Purchase Mortgage Production Growth Outpaces National Market
UWM PURCHASE MORTGAGE PRODUCTION GROWTH CONSISTENTLY OUTPACES NATIONAL MARKET Annual Growth - Purchase Mortgage Originations UWM Market Share - Purchase Mortgage Originations 100% 4.0% 90% 3.5% 80% 3.0% 70% 60% 2.5% 50% 2.0% 40% 1.5% 30% 20% 1.0% 10% 0.5% 0% 2015 2016 2017 2018 2019 0.0% -10% 2015 2
Slide 40: UWM – Rocket's Gain on Sale Comparison
UWM – ROCKET’S GAIN ON SALE COMPARISON Q2 ’20 Q3 ’20 Rocket Gain on Sale – Retail Network 5.09% 5.78% Gain on Sale – Partner Network 2.10% 2.70% Delta COS Retail to Partner 2.99% 3.08% Difference to Consumer In Price* 0.99% 1.08% In Rate** 0.25% 0.27% UWM (Wholesale) Gain on Sale 2.43% 3.18% Delta U
Slide 41: An Interwoven Focus
AN INTERWOVEN FOCUS UWM is 100% committed to Brokers BROKERS ARE who are motivated to find the best BETTER deal for their borrowers Brokers are Better HIGH QUALITY UWM focuses only on high credit quality Better government backed, QM loans LOANS Pricing To The High Quality Consumers UWM provides the
Slide 42: Why Invest?
1 2 3 Reliable Dominant player that is laser dividend Strong balance sheet focused on one market supported by consistent positioned to withstand (wholesale), with significant earnings despite industry market risks upside ahead cycles WHY 4 5 INVEST? Continued focus on managing for the long term Grow
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Slide 46: Appendix
APPENDIX Analyst Day Nov 2020APPENDIX Analyst Day Nov 2020
Slide 47: Financials: Balance Sheet
FINANCIALS: BALANCE SHEET Analyst Day Nov 2020FINANCIALS: BALANCE SHEET Analyst Day Nov 2020
Slide 48: Financials: Income Statement
FINANCIALS: INCOME STATEMENT Analyst Day Nov 2020FINANCIALS: INCOME STATEMENT Analyst Day Nov 2020
Slide 49: Financials: Equity/Retained Earnings
FINANCIALS: EQUITY/RETAINED EARNINGS Analyst Day Nov 2020FINANCIALS: EQUITY/RETAINED EARNINGS Analyst Day Nov 2020
Slide 50: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure. For the three For the nine For the twelve For the year ended months ended months ended months ended December 31, September 30, September 30, Se